Neteller
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| Type | Public (LSE: OPAY) |
|---|---|
| Industry | Online Banking |
| Founded | 1996 |
| Headquarters | Douglas, Isle of Man |
| Products | Online Payments/Money Transfer |
| Website | neteller.com |
Neteller is an e-money/e-wallet stored-value service owned and operated by publicly traded British global payments company Optimal Payments PLC. Consumers in over 180 countries[1] use the Neteller service to transfer money to and from merchants, almost exclusively online gambling firms, and can withdraw funds to their own bank accounts.
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[edit] Foundation and regulation
Neteller was founded in 1999 in Canada and moved to the UK in 2004[2]. The operation of the Neteller service has an e-money record with the UK government’s Financial Services Authority (FSA).[3] It is listed as an "Authorised Electronic Money Institution".[4]
Neteller is not a bank and does not lend customers' funds. It is required under FSA e-money regulations to maintain customer funds in separate trust accounts, separate from its operating cash, sufficient to repay all customer balances at the same time.[5]
[edit] Online gambling
Neteller began processing online gambling payments in July 2000. By 2005, it was processing payments for 80% of the world's gambling merchants. 95% of the firm's revenue at that time was derived from fund transfers to online gaming firms, with most users US residents.[6]
Neteller founders Stephen Lawrence and John Lefebvre were arrested in the US Virgin Islands, and California respectively, and charged with conspiring to transfer funds with the intent to promote illegal gambling, on 15 January 2007.[7] Accounts of US users were frozen as the firm exited the US, and funds were eventually returned after 30 July 2007.[8] Lefebvre and Lawrence each forfeited $100 million to the US government, while Neteller forfeited $136 million.[9]
As a result of this enforced exit from the US market, and the risks associated with online gambling, the firm has sought to diversify. Despite this, Neteller fee revenues fell from $239 million in 2006 [10] to $44 million in 2010 [11].
Legal issues surrounding online gambling mean that customers in Canada, Hong Kong, Israel and Macau are not permitted to make transfers to gambling merchants.[12][13]
[edit] Product capabilities
Consumers can sign up for a Neteller account on the company’s website[14]. Accounts may be set up in any major currency including: AUD, BGN, CAD, DKK, EUR, GBP, HUF, INR, JPY, LTL, LVL, MXN, NOK, PLN, RON, SEK, USD. Money can be loaded into the account from a bank, credit/debit card or via many other other methods including Giropay, iDEAL, Ukash, Direct e-Banking or POLi[15]. These deposit types vary by country and some are instant.
Money in a Neteller account can be used to pay merchants, sent to other customers of the service, or spent at any retailer that accepts MasterCard using the Neteller debit card that is part of the account[16]. Money can also be received into the account directly from merchants, such as gambling winnings, insurance payouts or video-gaming trading proceeds. Customers can withdraw funds from their accounts by bank transfer, cheque, or using the company’s Net+ MasterCard debit card at point-of-sale and automated teller machines.
[edit] Neteller Net+ card
In 2003 the company launched the Neteller Card[17]. In 2007 it replaced these cards with MasterCard debit cards and re-branded the card product line as Neteller Net+ in 2008[18]. Under the Neteller Net+ name the company offers both plastic and virtual MasterCard prepaid debit cards, and merchant-brandable card programs[19]. The Net+ virtual card helps prevent fraud as each card number is only used once. This means if a merchant’s site is hacked the consumer’s identity and money is protected as the card number cannot be used again.
[edit] Notes
- ^ Isle of Man government: Neteller case study
- ^ Timeline/history
- ^ FSA authorisation record
- ^ E Money Register
- ^ Consumer's funds held in trust
- ^ U.S. CHARGES TWO FOUNDERS OF PAYMENT SERVICES COMPANY WITH LAUNDERING BILLIONS OF DOLLARS OF INTERNET GAMBLING PROCEEDS
- ^ http://www.businessweek.com/technology/content/jan2007/tc20070117_231006.htm?chan=top+news_top+news+index_businessweek+exclusives
- ^ http://www.pokerlistings.com/neteller-begins-longawaited-payout-plan-16341
- ^ http://www.internetnews.com/bus-news/article.php/3689631
- ^ http://www.optimalpayments.com/pdf/26.pdf
- ^ http://www.optimalpayments.com/pdf/138.pdf
- ^ Canada sticks the boot into Neteller
- ^ https://help.neteller.com/app/answers/detail/a_id/6/kw/hong%20kong
- ^ neteller.com Account Sign up
- ^ Company Website: Funding and Fees
- ^ Predictem.com: Neteller Review
- ^ Timeline/history
- ^ Finextra: Net+ card launched
- ^ Net+ card review
